The asymmetry of information on customs values and its effects on revenue, a case study of the mining list and statutory free and exempt goods
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Date
2009-08-09
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Abstract
Customs, Excise and Preventive Service (CEPS) is one of the three revenue collecting Institutions and have been contributing about 56% of national revenue. As a member of the World Customs Council and World Trade Organization (WTO), in April 2000 it adopted the WTO valuation system and abolished the Commissioner’s Valuation List. Importers produced supplier’s invoice which were authenticated by the accredited Destination Inspection Companies (DIC). However, with the advent of the new system of valuation, there was a hue and cry by CEPS that importer’s with the connivance of the DIC, were undervaluing dutiable imports with the sole aim of paying less than expected taxes. That the Mining Companies which also enjoyed exempt on their import were inflating value to repatriate more capital then they brought in. This research therefore set to prove this allegation with facts and figures. It consequently gathered data on values on some selected items imported by mining and non-mining companies for the 2008 through the GCNet. The items were automobile battery, tyres, and Toyota Hilux pick-ups. The means of the mining companies were found to be higher than the non-mining companies. However, a t-test for the two independent means with the exception of the battery found significant differences between the means. This therefore confirmed the hypothesis that “goods that are statutory free or exempt are not valued the same as counterparts goods when dutiable”. The sample size as compared to the volume of imports was small, consequently a larger sample size was recommended as well as the adoption of a uniform and standard method of describing imported goods were also suggested. This was to ensure that identical goods were described in the same manner irrespective of the entry point that the goods were being imported for easy identification and comparison. The finding could also be used to settle the debate as to whether CEPS or the IC should perform the function of valuation and classification of imported goods.
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A Thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the degree of Commonwealth Executive Masters in Business Administration,(CEMBA)